1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 C S BIO CO., et al., 10 Case No. 22-cv-05033-RS Plaintiffs, 11 v. ORDER CONTINUING HEARING AND 12 REQUESTING FURTHER BRIEFING

COMERICA BANK,

13 Defendant. 14

15 16 The hearing set for December 4, 2025, is hereby continued to January 8, 2025, to permit 17 further briefing, as specified below. Defendant Comerica Bank’s motion for summary judgment 18 contends plaintiffs CS Bio Co. and CCS Management, LLC (collectively “CS”) lack evidence to 19 show a triable issue of fact that they suffered damages caused by Comerica’s alleged 20 misrepresentations. The order granting in part and denying in part the motion to dismiss the 21 Second Amended Complaint found that CS had viable claims based on two basic alleged 22 misrepresentations: (1) assurances Comerica allegedly gave on November 20, 2020, and again on 23 November 23, 2020, that CS could and should pay its contractor’s October invoice in the amount 24 of $738,000 without jeopardizing funding of the loan, and that the payment would therefore be 25 reimbursed through the loan proceeds, and (2) an assurance on November 24, 2020, that any 26 violation of the FCCR covenant would be waived. See Dkt. No. 64. The order explained that 27 liability for those assurances could either be pursued under the first claim for relief for “Fraud — 1 relief. The order noted the same alleged misrepresentations were recast as concealments/failures 2 to disclose in the fourth claim for relief, which was also viable, although it added nothing of 3 substance. 4 CS subsequently moved for leave to file a third amended complaint, arguing, among other 5 things, that discovery had revealed further evidence related to (1) the alleged falsity, when made, 6 of assurances that the FCRR issue would not preclude final loan approval, and (2) the actual 7 impact of the financial condition of CS customer Intarcia on Comerica’s decision not to go 8 forward with the loan. The order denying leave to amend stated:

9 The existing complaint adequately sets out a basis for plaintiffs to present at trial (or in response to any summary judgment motion) the 10 arguments it is now making regarding Intarcia and the FCCR, as 11 well as the evidence on those issues that has come to light in discovery. While plaintiffs’ proposed amendments arguably would 12 state the claims with slightly more clarity and with greater factual detail, they do not represent new, unpleaded, claims, and they are 13 not required for plaintiffs to go forward. 14 15 Dkt. 95. 16 Comerica’s motion for summary judgment expressly addressed only the November 20, 23, 17 and 24, 2020, alleged assurances mentioned above regarding payment of the contractor invoice 18 and waiver of the FCRR covenant. In opposition, CS argued the order denying leave to file a third 19 amended complaint effectively left it free to argue any number of purported misrepresentations in 20 September of 2020, and thereafter, are actionable. To be clear, the effect of the order denying 21 leave to file a third amended complaint is only that CS may pursue a claim that Comerica falsely 22 promised Intarcia’s financial condition would not preclude final loan approval, to the extent such a 23 claim was not otherwise explicitly set out in the Second Amended Complaint.1 24 That said, Comerica’s reply in support of its motion for summary judgment shows its 25 26 1 The proposed amendments related to waiver of the FCRR indisputably at most were further factual allegations in support of an existing claim, not expansion of the claims. 27 1 arguments as to lack of causation and damages are intended to apply equally to all of the viable 2 misrepresentation claims. The issue, therefore, is whether there is a triable issue of fact that CS 3 suffered damages resulting from the alleged misrepresentations/false promises/failures to 4 disclose/concealments. 5 As noted, Comerica’s motion asserts CS can show no causally related damages. 6 Comerica’s moving papers appear to satisfy its initial burden to show CS lacks the requisite 7 evidence, such that the burden shifts to CS to show at least a triable issue of fact. Even assuming, 8 however, that Comerica did not meet its initial burden, and/or that its causation and damages 9 arguments do not expressly focus on all of the potentially dispositive issues, the present record 10 suggests CS may have no basis to recover damages here. 11 CS’s opposition to the motion for summary judgment characterizes its alleged damages in 12 two section headings: “F. As a Result of Loan Termination, CS Bio Needed to Secure a New 13 Lender, Construction Was Delayed, and Lucrative Leasing Opportunities Vanished,” and 14 “G. CS Bio Was Also Damaged Through Higher Interest Rates.” As reflected in these headings 15 and in the text of CS’s briefing, its damages theories largely are premised on contrasting what CS 16 contends would have happened if the loan had been approved, with what happened when it was 17 not. This appears to be the wrong measure of damages for the alleged fraud. 18 CS seems to understand correctly that it cannot contend there was ever any enforceable 19 promise to fund the loan. This is not a breach of contract action, seeking either specific 20 performance or contractual damages.2 Accordingly, the question is not what position CS would 21 have been in had the loan gone through. Rather, the issue is what, if any, damages CS can show it 22 suffered as a result of its reasonable reliance on the alleged misrepresentations/false 23 promises/failures to disclose/concealments. Some of CS’s existing briefing seems to recognize this 24 point. See e.g., Dkt. 129-2 at ECF p. 18. (“But for Comerica’s false statements, CS Bio would not 25

26 2 Contrast a case cited by CS, Bushell v. JPMorgan Chase Bank, N.A.,163 Cal. Rptr. 3d 539, 550 (Cal. App. 2013), in which a promise to provide a permanent loan modification upon satisfaction 27 of specified conditions was held potentially enforceable as a breach of contract. 1 have proceeded with construction.”’) 2 The primary focus of CS’s argument, however, is on financial benefits it contends it would 3 have received if the Comerica loan had been approved and funded. See, e.g., id., at ECF p. 27 4 || (‘the primal cause of all delays was Comerica’s cancellation of the Term Sheet, which delayed 5 final construction of the Buckeye Property.”) Furthermore, even to the extent CS asserts it was 6 || damaged by relying on the alleged misrepresentations (as opposed to alleged damages arising 7 || from the fact the loan was not approved and funded), it has offered little evidence supporting or 8 quantifying those damages, or showing there are at least triable issues of fact. 9 These issues of causation and the existence of damages are plainly implicated by 10 Comerica’s motion. In an abundance of caution, however, and to ensure a clear record and that 11 due process is satisfied, CS is advised under Rule 56(f) of the Federal Rules of Civil Procedure 12 || that summary judgment may be entered against it on the grounds discussed in this order, whether 5 13 or not those grounds are fully presented in Comerica’s motion. 14 Accordingly, pursuant to Rule 56(f), CS may file a supplemental brief, not to exceed 18 3 15 pages, within one week of the date of this order. Comerica may file a supplemental reply, also not 16 || toexceed 18 pages, within one week thereafter.

19 || ITISSO ORDERED. 20 21 Dated: December 12, 2025 22 73 RICHARD SEEBORG _ Chief United States District Judge 24 25 26 27 *8 CasE No. 22-cv-05033-RS